Mortgage Frequently Asked Questions
Find answers to the most common mortgage questions about buying a home, refinancing, renewals, credit requirements, and mortgage qualification.
Buying a Home
How much down payment do I need to buy a home?
In Canada, the minimum down payment is generally:
• 5% on the first $500,000
• 10% on the portion between $500,000 and $1,500,000
A larger down payment may help reduce mortgage insurance costs and improve affordability.
How much mortgage can I qualify for?
Qualification depends on your income, debts, credit profile, down payment, and lender guidelines. Use our Mortgage Qualification Analyzer to get an estimate.
What credit score do I need?
Many lenders prefer scores above 680 for the best rates, but mortgage options may still be available for borrowers with lower credit scores depending on the overall application.
Refinancing
Can I refinance my home?
Yes. Homeowners may refinance their mortgage to access equity, consolidate debt, finance renovations, or obtain a more suitable mortgage product. Lender approval is required and qualification criteria will apply.
How much equity do I need to refinance?
Most lenders allow homeowners to refinance up to 80% of the property’s current value. The amount available depends on your home’s value, existing mortgage balance, income, and credit profile.
Can I consolidate debt through refinancing?
Yes. Refinancing may allow you to combine higher-interest debts such as credit cards, personal loans, and lines of credit into your mortgage. This can simplify payments and potentially reduce monthly obligations.
Mortgage Renewals
Should I accept my bank's renewal offer?
Not necessarily. Renewal offers may be convenient, but they are not always the most competitive. Comparing options from multiple lenders may help you secure a better rate, improved terms, or greater flexibility.
Can I switch lenders at renewal?
Yes. Many homeowners switch lenders at renewal to obtain better rates or products. In many cases, switching can be completed with little or no cost, depending on the lender and circumstances.
Do I need to requalify?
If you remain with your current lender, requalification is often not required. However, if you switch lenders, qualification requirements may apply depending on the lender’s policies and your financial situation.
Credit Challenges
Can I get a mortgage after a consumer proposal?
Possibly. Many lenders consider applications from borrowers who have completed or are actively rebuilding credit after a consumer proposal. The available options will depend on credit history, equity, income, and overall financial strength.
Can I qualify after bankruptcy?
Yes. Mortgage options may be available after a bankruptcy discharge. Factors such as time since discharge, re-established credit, income stability, and down payment or equity will be important considerations.
Can I qualify with bruised credit?
Yes. While prime lenders generally prefer stronger credit profiles, alternative lending solutions may be available for borrowers with credit challenges. Each application is reviewed based on the complete financial picture.
Mortgage Qualification
What is GDS?
Gross Debt Service (GDS) measures the percentage of your income required to cover housing expenses, including mortgage payments, property taxes, heating costs, and applicable condo fees.
What is TDS?
Total Debt Service (TDS) measures the percentage of your income required to cover all housing expenses plus other monthly debts such as loans, credit cards, and lines of credit.
What income can be used to qualify?
Depending on the lender, qualifying income may include employment income, self-employment income, pension income, rental income, commission income, and certain government benefits.
How do lenders determine affordability?
Lenders review income, debt obligations, credit history, down payment, property details, and mortgage stress-test requirements to determine affordability.
Buying a Home
What are closing costs?
Closing costs may include legal fees, title insurance, property tax adjustments, home inspections, and other transaction-related expenses. Buyers should budget approximately 1.5%–4% of the purchase price depending on their situation.
Still Have Questions?
Every mortgage situation is unique. Speak with a licensed mortgage professional for personalized advice.
